“The Senate inquiry into corporate tax has highlighted the importance of global efforts to ensure the international tax system remains robust and that companies have acted within the law in Australia,” Business Council of Australia Chief Executive Jennifer Westacott said.
“Businesses must accept their tax obligations and be transparent, and where the law is breached the authorities should act. It is equally essential that debate is evidence-based to maintain community and investor confidence in Australia’s high-integrity tax system,” Ms Westacott said.
“Australia has some of the toughest tax integrity measures in the world, which together with high levels of compliance and enforcement, contribute to large corporate tax revenues. Company tax receipts are expected to be around $70 billion this year.
“Within the OECD, Australia’s corporate tax revenues as a share of GDP are second only to Norway. The priority for government is to maintain the integrity of the system while ensuring the company tax burden does not impede Australia’s economic competitiveness and attractiveness for investment.
“Where laws are no longer meeting accepted community norms governments need to respond, but changes must be carefully considered to avoid unduly deterring investment, reducing our competitiveness or creating unnecessarily complex tax arrangements.
“There are legitimate questions about how well long-standing international tax conventions are performing in the face of increasing globalisation and digitisation. Businesses are now competing in a 21st century global marketplace using 21st century digital tools, and our tax laws have to keep up.
“This is why the G20 has commissioned the OECD to act as the prime multilateral forum for progressing tax integrity reforms through the Base Erosion and Profit Shifting Action Plan (BEPS).
“Global issues require a global solution, which is why success of the BEPS process is important.
“A multilateral solution will be vital to avoid countries going it alone with ‘beggar thy neighbour’ responses that could result in double taxation, much higher compliance costs and the undermining of legitimate commercial arrangements.
“Such outcomes would be to the detriment of global investment, trade, jobs and growth, and especially harmful for Australia as a medium-sized open economy heavily dependent on trade and foreign investment,” she said.
For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8664 2664 • Mobile 0403 241 128